Section CU 8 — Income Tax Act 2007: Compensation and scrap payment: more than expenditure

CU 8 Compensation and scrap payment: more than expenditure When this section applies (1) This section applies when— (a) the mining company complies with section CU 6(2) ; and (b) the company incurs expenditure in replacing or repairing the asset; and (c) the company has an excess amount because the expenditure is less than the total of the following: (i) the amount of insurance, indemnity, or compensation paid; and (ii) the amount, if any, payable to the company for the disposal of any scrap of the asset. Income (2) The excess amount is income from mining of the company, whether or not the company is still a mining company when the excess amount is determined. Timing of income (3) The income from mining is allocated to the income year in which the replacement or repair of the asset is completed or is treated as completed. When replacement or repair treated as completed (4) The replacement or repair, even if not completed, is treated as completed— (a) on the last day of the period, if any, considered by the Commissioner to be a reasonable period in which to complete the replacement or repair; or (b) on the day on which work on the replacement or repair stops; or (c) on the day on which the asset is transferred from the company’s mining operations and used, wholly or mainly, to derive income other than income from mining; or (d) on the day on which the company disposes of the asset other than for scrap; or (e) on the day on which the company stops being a mining company. Limitation on calculation of excess amount (5) Expenditure incurred after the day on which the work is treated as completed is not taken into account to determine the existence or amount of an excess amount for the purposes of subsection (1)(c). Defined in this Act: amount , asset , Commissioner , company , income , income from mining , income year , mining company , mining operations , pay , Compare: 2004 No 35 s CU 8